It offers training in the form of pre-apprenticeship courses, certificates, diplomas and advanced diplomas.

Managing director Jonathan Davis said some fixed-term contracts had not been renewed.

"There contracts are linked to project funding that has come to an end. We also have a number of casual staff whose contracts are also coming to an end because it's the end of the academic year," he said.

"We'll be in a position to offer some of those staff contracts in the new year when we know how many students we've recruited."

Mr Davis would not confirm how many contracts would end.

"We're still working through that and meeting with staff individually," he said.

"I'm not sure it would be as many as that, [as 40 jobs], it's probably less than [40] but there are a number of staff whose contracts will come to an end."

"Historically because of the changes we have been through have appointed a higher proportion of fixed-term and casual staff than a normal TAFE institute would do. I've obviously inherited that situation and what we've got to do know is to create more permanency and stability for our staff. This is just part of that process.

Union says job-uncertainty tough for workers over Christmas

Australian Education Union Gippsland organiser Jeff Gray said the job losses were disappointing.

"Unfortunately across the whole TAFE system there's too much reliance on contract staff," he said.

"It's a terrible position to be in leading into Christmas."

Mr Gray said Federation Training was still suffering from the affects of TAFE funding cuts delivered in 2012.

He said he administrative positions would go, resulting in teachers having to pick up more administration tasks on campus.

"Morale is affected by that sort of thing," he said.

"It does mean a lot of extra work is going to be landing on the desks of teachers."